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of Aetna 2000 - Case Study Example
It announced a plan to purchase another insurance company using stock and cash amounting to $10billion, which is the value of the company. The company has been making in…
been purchasing a new business, thus, expanding its range of operations, and in turn having a variety of services in the healthcare sector with its various health products. They also offer a range of financial products and services.
The company, due to its acquisition of a number of businesses, operates internationally and even provides pension services. The company is considering reorganizing its structures so that the health services will be grouped as global health, and the financial services will be grouped as global financial. This will facilitate efficiency and cost effectiveness in the company due to the sharing of resources for both local and international operations, as well as the use of technology. Through this, quality will be achieved in the company’s operations. Due to the procedure of its operation and those of the newly purchased businesses, the company is facing so many legal issues, with the government finding out that it is operating against what is legally recommended for such operations.
After acquisition of Well Point Inc. business, Aetna went into an agreement to purchase other businesses dealing in insurance products, yet the businesses were operating as non-profit ones yet Well Point is a profit making business. This means that Aetna did not expect to make any profits from the acquisition. The company was involved in the provision of managed health care services. It is provided that for any loss of life, such businesses will be liable, and with this being a law within the nation, the business was obliged to ensure that no loss occurs to their client so that they are not held liable.
There has been an increase in the cost of health care in the nation with a very high percentage. This has affected the company because just like other companies in the organization, they are committed to enhancing a reduction of the cost for the benefit of their clients, which may results to a decline in profitability. There is increased competition from ...